/EGBS/MBS: Treasuries drift off the day's...>

US TSYS: /EGBS/MBS: Treasuries drift off the day's price highs amid light

profit-taking. German Bunds and UK Gilts closed out their day higher, aiding

Tsys, now Tsys drift off as the European factor fades. Spain, Italy and Portugal

govt debt meanwhile weaken on the day.

- Buyside analyst Sadakichi Robbins noted "this tight range for cash 10-year

notes is holding, as the bottom of range at 2.30% intersects with the 200-day

moving average, while the yield top is protected by a 2.40ish double top.

Something has to give."

- He noted that "outside of 10's, there is plenty of movement in the Treasuries

curve (flatter) and swap spreads (wider) as combination of regulatory change and

global demand for safe yield interact."

- He noted on MBS that the MBS "basis has been behaving very well in the

flattening environment, as they reap benefit from the skew of their partial

durations."